21st Mar 2023 09:10
(Alliance News) - DIY retailer Kingfisher PLC on Tuesday reported a sharp drop in profit in its most recently ended financial year but said the performance was in-line with its expectations and guidance against a strong comparator year.
In the financial year that ended January 31, the B&Q-owner reported a pretax profit of GBP611 million, down 39% from GBP1.0 billion the year prior. This reflected lower operating profit and the impact of impairments following significant increases in discount rates and revised future projections, the London-based company explained.
Adjusted pretax profit was GBP758 million, down 20% from GBP949 million. It was forecasted to decline 22% to GBP741 million. Kingfisher in November cut its adjusted pretax profit estimate to between GBP730 million to GBP760 million, from around GBP770 million previously.
Adjusted earnings per share declined by 16% to 29.7 pence from 35.2p the year before. Basic earnings per share was down by 41% to 23.8 pence from 40.3p the year before.
Sales slipped 0.9% year-on-year to GBP13.06 billion from GBP13.18 billion. Group like-for-like sales fell 2.1%. This is compared to an expected fall of 2.0%, according to company-compiled consensus.
In UK & Ireland, sales dropped by 24% to GBP603 million from GBP794 million the year before. In France, sales were down 12% to GBP195 million from GBP221 million.
Total retail profit fell by 20% to GBP923 million from GBP1.15 billion. This was in line with company-compiled consensus.
Chief Executive Officer Thierry Garnier said: "Across all our markets, sales have remained resilient in both DIY and DIFM/trade channels, with like-for-like sales 15.6% ahead of pre-pandemic levels. We have maintained a sharp focus on pricing to deliver value to our customers during this challenging period for household finances, while at the same time managing our cost inflation pressures effectively."
Kingfisher declared a final dividend of 8.60 pence per share, unchanged from a year prior. It thus maintained its total dividend at 12.40 pence per share.
Looking ahead, the company said it is comfortable with current consensus of sell-side analyst estimates for financial 2024 adjusted pretax profit of GBP633 million. Kingfisher said in February of the current financial year, sales were up 1.9%, adding that the main driver was a good performance in the UK & Ireland, with LFL sales growth at both B&Q and Screwfix.
Additionally, Kingfisher said it expects more than GBP500 million of free cash flow for the year, and said it intends to announce a new share buyback programme following completion of the existing programme this year.
Shares were down 0.3% at 272.60 pence each on Tuesday morning in London.
By Xindi Wei, Alliance News reporter
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